South Africa’s national energy regulator, Nersa is currently in discussions with experts worldwide to ensure that it goes about the implementation of its feed in tariff (FIT) scheme, in a way that will be advantageous to both consumers and Eskom.
The FIT scheme, if successful will help customers to reduce their bills by feeding excess supply to the grid at retail prices. It will also remunerate customers at a ‘different rate for selling electricity than at the retail rate for consuming’, says a report by CNBC Africa.
Nersa’s executive manager, Mbulelo Ncetezo said they have learnt from examples in Germany and Spain, where they have had difficulty in successfully implementing renewable feed-in-tariff schemes. Ncetezo stated that Nersa had tried to do the same in 2008, using photovoltaics (PV) at R3.94 per unit of electricity, but had decided against it. They had since introduced a system of competitive bidding driving prices down.
Ncetezo hopes that with the right regulatory framework in place, South African market will free for new entrants to compete with one another with minimal regulator intervention.
As for South Africa’s nuclear programme expected to generate a considerable amount of energy, Ncetezo says that nuclear energy will drive electricity prices up due to the large amount of capital expenditure required, however ‘the [operational expenditure] Opex is low. So the Hurdle that we have to go through is that Capex stage.’